Testbank Management Ch-1

Chapter 01The Management Process Today

True / False Questions

1. Organizations are collections of people who work together and coordinate their actions to achieve a wide variety of goals, or desired future outcomes. True False

2. The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively is known as management. True False

3. Organizations are efficient when managers maximize the amount of input resources. True False

4. The number of students competing for places in business courses is on a constant decline. True False

5. Managers at all levels and in all departments are responsible for planning, organizing, leading, and controlling. True False

6. Identifying and selecting appropriate organizational goals and courses of action help managers perform the planning task. True False

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7. Planning strategy is clear and easy, especially because planning is done under certainty when the result is known. True False

8. The outcome of organizing is the creation of a strategy. True False

9. An organization's vision is a short, succinct, and inspiring statement of what the organization intends to become and the goals it is seeking to achieve. True False

10.

The controlling task helps managers evaluate how well they themselves are performing the other three tasks of management—planning, organizing, and leading—and take corrective action. True False

11.

The top-line managers form the base of the managerial hierarchy. True False

12.

The middle managers supervise the supervisors. True False

13.

In contrast to middle managers, top managers are responsible for the performance of specific departments. True False

14.

The chief executive officer is a company's most senior and important manager, the one all other top managers report to. True False


15.

Today, the term "chief operating officer" refers to the chief executive officer. True False

16.

Conceptual skills include the general ability to understand, alter, lead, and control the behavior of other individuals and groups. True False

17.

Human skills can be learned through education and training, as well as be developed through experience. True False

18.

The array of technical skills managers need is independent of the position they hold in their organizations. True False

19.

Departmental skills that create a core competency give an organization a competitive advantage. True False

20.

Restructuring involves contracting with another company, in a low-cost country abroad, to have it perform a work activity the organization previously performed itself. True False

21.

Restructuring results in the loss of jobs. True False

22.

Outsourcing decreases efficiency because it increases operating costs. True False


23.

Companies use their reward systems to promote empowerment. True False

24.

When employees start using information technology (IT), they start losing their autonomy. True False

25.

A self-managed team refers to a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities. True False

26.

Not-for-profit sectors are not affected by global competition. True False

27.

The four building blocks of competitive advantage are superior efficiency, quality, innovation, and responsiveness to customers. True False

28.

An organization's efficiency decreases when it reduces the quantity of resources it uses to produce goods or services. True False

29.

Innovation is the process of creating new or improved goods and services that customers want. True False

30.

Typically innovation takes place in small groups or teams. True False


31.

Innovation takes place when management centralizes control of work activities and creates an organizational culture that precludes risk taking. True False

32.

Turnaround management is the creation of a new vision for a struggling company based on a new approach to planning and organizing to make better use of a company's resources and allow it to survive and prosper. True False

33.

Organizations appoint turnaround CEOs when the organizations become more efficient and effective. True False

34.

Pressure to increase performance may induce managers to behave unethically. True False

35.

Managers seldom find it difficult to manage the diversity in today's workforce. True False

Multiple Choice Questions


36.

Which of the following is NOT true about management and organizational resources?

A. Organizations are collections of people who work together to achieve a wide variety of goals.

B. Managers are responsible for making the most of an organization's human resources to achieve its goals.

C. Management is the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively.

D. An organization's resources include assets such as machinery, raw materials, and computers and information technology.

E. Organizational performance increases in an indirect proportion to increases in efficiency and effectiveness.

37.

Which of the following is an appropriate definition of organizational performance?

A. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization.

B. It is a measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals.

C. It is an approach to modeling organizations using one-on-one interactions between members of the organization as a proxy for all value-adding activities in the organization.

D. It is a management framework that uses and integrates existing management methods and techniques to help teams deliver ever-improving services.

E. It is a measure of the interaction between the managerial culture, the workplace culture, and the surrounding culture.


38.

_____ is a measure of how productively resources are used to achieve a goal.

A. Validity

B. Generalizability

C. Efficiency

D. Effectiveness

E. Reliability

39.

Which of the following is true of efficiency?

A. It is a measure of the appropriateness of the goals that managers have selected for the organization to pursue.

B. Organizations are efficient when managers choose appropriate goals and then achieve them.

C. Lesser the efficiency, higher the organizational performance.

D. Organizations are efficient when managers minimize the amount of input resources.

E. Organizations are efficient when managers maximize the amount of time needed to produce a given output of goods.


40.

_____ is a measure of the appropriateness of the goals that managers have selected for the organization to pursue and the degree to which the organization achieves those goals.

A. Efficiency

B. Generalizability

C. Reliability

D. Utility

E. Effectiveness

41.

Which of the following is true of effectiveness?

A. Organizational performance increases in direct proportion to increase in effectiveness.

B. Organizations are effective when managers minimize the time needed to produce a given output of services.

C. It is a measure of how productively resources are used to achieve a goal.

D. Organizations are effective when managers minimize the amount of input resources.

E. Effectiveness is related to performance but not efficiency.


42.

Which of the following is true of low efficiency/high effectiveness situations?

A. They arise when managers choose the wrong goals to pursue and make poor use of resources.

B. They arise when managers choose the right goals to pursue, but do a poor job of using resources to achieve these goals.

C. They arise when managers choose the right goals to pursue and make good use of resources to achieve these goals.

D. They result in the production of a low-quality product that customers do not want.

E. They result in the production of a high-quality product that customers do not want.

43.

High efficiency/high effectiveness situations:

A. arise when managers choose the wrong goals to pursue and make poor use of resources.

B. result in the production of a low-quality product that customers do not want.

C. result in the production of a product that customers want at a quality and price that they can afford.

D. result in the production of a product that customers want, but that is too expensive for them to buy.

E. arise when managers choose inappropriate goals, but make good use of resources to pursue these goals.


44.

Which of the following is true of low efficiency/low effectiveness situations?

A. They arise when managers choose the right goals to pursue, but do a poor job of using resources to achieve these goals.

B. They result in the production of a product that customers want, but that is too expensive for them to buy.

C. They result in the production of a product that customers want at a quality and price that they can afford.

D. They arise when managers choose the wrong goals to pursue and make poor use of resources.

E. They arise when managers choose inappropriate goals, but make good use of resources to pursue these goals.

45.

The goals chosen by the management of Dino's Cafe seemed inappropriate for the store, but the management did make good use of the various resources in pursuing these goals. Dino's Cafe is said to have:

A. low efficiency and high effectiveness.

B. high efficiency and high effectiveness.

C. low efficiency and low effectiveness.

D. low conceptual skills and low human skills.

E. high efficiency and low effectiveness.


46.

In what order do managers typically perform the managerial functions?

A. Organizing, planning, controlling, leading

B. Organizing, leading, planning, controlling

C. Planning, organizing, leading, controlling

D. Planning, organizing, controlling, leading

E. Leading, organizing, planning, controlling

47.

To perform the _____ task, managers identify and select appropriate organizational goals and courses of action.

A. planning

B. organizing

C. leading

D. controlling

E. commanding


48.

How to allocate organizational resources to pursue the strategies that attain set goals, is a question addressed during:

A. regulating.

B. planning.

C. leading.

D. controlling.

E. commanding.

49.

Which of the following refers to a cluster of decisions concerning what organizational goals to pursue, what actions to take, and how to use resources to achieve these goals?

A. Synergy

B. Value

C. Strategy

D. Mission

E. Business model


50.

Which of the following strategies helps an organization to obtain customers by making decisions that allow it to produce goods or services more cheaply than its competitors?

A. Disintermediation strategy

B. Centralization strategy

C. Penetration strategy

D. Low-cost strategy

E. Differentiation strategy

51.

The strategy of delivering new, exciting, and unique products to the customers is known as a _____ strategy.

A. low-cost

B. disintermediation

C. centralization

D. penetration

E. differentiation


52.

_____ is the process of structuring working relationships so that organizational members interact and cooperate to achieve organizational goals.

A. Planning

B. Leading

C. Commanding

D. Controlling

E. Organizing

53.

When a manager lays out the lines of authority and responsibility among different individuals and groups, the manager is:

A. organizing.

B. leading.

C. controlling.

D. planning.

E. staffing.


54.

A formal system of reporting relationships that coordinates and motivates organizational members so that they work together to attempt to achieve organizational goals is called an organizational:

A. culture.

B. psychology.

C. structure.

D. assimilation.

E. chart.

55.

An organization's _____ is a short, succinct, and inspiring statement of what the organization intends to become.

A. goal

B. value

C. strategy

D. vision

E. mission


56.

When managers _____, they articulate a clear organizational vision for the organization's members to accomplish, and they energize and enable employees so that everyone understands the part he/she plays in achieving organizational goals.

A. plan

B. organize

C. control

D. command

E. lead

57.

Which of the managerial functions involves managers using their power, personality, influence, persuasion, and communication skills to coordinate people and groups so that their activities and efforts are in harmony?

A. Leading

B. Planning

C. Organizing

D. Controlling

E. Arranging


58.

Which of the following is true of leadership?

A. It helps managers evaluate how well they themselves are performing.

B. It revolves around encouraging all employees to perform at a high level to help the organization achieve its vision and goals.

C. Managers evaluate how well an organization has achieved its goals and take corrective actions needed to improve performance.

D. It revolves around regulation of organizational efficiency and effectiveness.

E. Managers decide which goals to measure and then design control systems that will provide the information necessary to assess performance.

59.

In _____, the task of managers is to evaluate how well an organization has achieved its goals and to take any corrective actions needed to maintain or improve performance.

A. planning

B. organizing

C. leading

D. staffing

E. controlling


60.

Which of the following processes gives the managers the ability to measure performance accurately and regulate organizational efficiency and effectiveness?

A. Controlling

B. Planning

C. Organizing

D. Leading

E. Staffing

61.

Mark, a manager at Matt's Shack, monitors the work performance of workers in his department to determine if the quality of their work is meeting the standards of the company. Mark is engaging in which of the following managerial functions?

A. Planning

B. Staffing

C. Organizing

D. Leading

E. Controlling


62.

Susan, the CEO of United Group Ltd., reviews the performance of her company in the past month's Profit & Loss Statement to determine if the company is on pace to meet the planned sales and profitability goals. Susan is engaged in which of the following managerial functions?

A. Planning

B. Organizing

C. Staffing

D. Controlling

E. Leading

63.

First-line managers:

A. increase efficiency by helping middle-level managers better use resources to reduce manufacturing costs or improve customer service.

B. are also known as supervisors.

C. are at the top of the managerial hierarchy.

D. work in one single department of an organization.

E. are responsible for finding the best way to organize human and other resources to achieve organizational goals.


64.

Which of the following is true of middle managers?

A. They decide how the different departments should interact.

B. They are responsible for daily supervision of the nonmanagerial employees who perform the specific activities necessary to produce goods and services.

C. They develop and fine-tune skills and know-how that allow the organization to be efficient and effective.

D. They are responsible for the performance of all departments.

E. They establish organizational goals.

65.

Which of the following is true of top managers?

A. They are responsible for finding the best way to organize human and other resources to achieve organizational goals.


C. They find ways to help first-line managers and nonmanagerial employees better use resources to reduce manufacturing costs or improve customer service.

D. They have cross-departmental responsibility.

E. They are responsible for a single department.


66.

Who amongst the following is most likely to be a part of the top management team?

A. Supervisor

B. Head nurse

C. Chief mechanic

D. Divisional manager

E. Chief executive officer

67.

Being a part of top management at a large fast food chain, Donald is most likely to spend more of his time in:

A. planning and organizing resources.

B. planning and controlling nonmanagerial employees.

C. planning and leading first-line managers.

D. organizing resources and controlling nonmanagerial employees.

E. organizing resources and leading first-line managers.


68.

The ability to analyze and diagnose a situation and to distinguish between cause and effect demonstrates a manager's:

A. interpersonal skills.

B. conceptual skills.

C. human skills.

D. technical skills.

E. communication skills.

69.

_____ skills include the general ability to understand, alter, lead, and control the behavior of individuals and groups.

A. Analytic

B. Cognitive

C. Human

D. Technical

E. Conceptual


70.

The job-specific skills required to perform a particular type of work at a high level are a part of a manager's:

A. human skills.

B. communication skills.

C. interpersonal skills.


E. conceptual skills.

71.

The specific set of departmental skills, knowledge, and experience that allows one organization to outperform its rivals is known as the organization's:

A. strategy.

B. vision.

C. goal.

D. mission.

E. core competency.


72.

Simplifying, shrinking, or downsizing an organization's operations to lower operating costs is known as:

A. restructuring.

B. outsourcing.

C. empowering.

D. innovating.

E. telecommuting.

73.

Fresh Farms, Inc., is facing financial problems. In order to tackle the situation, the management has decided to reduce the number of middle managers by 20 percent to help them cut costs. This is an example of:

A. telecommuting.

B. restructuring.

C. outsourcing.

D. empowering.

E. innovating.


74.

The company for which Margaret works has announced that due to declining global sales, it will lay off 12 percent of its labor force. This is an example of:

A. innovating.

B. telecommuting.

C. restructuring.

D. outsourcing.

E. empowering.

75.

Which of the following is true of restructuring?

A. It increases the operating costs.

B. It reduces the morale of the remaining employees.

C. It does not change the levels in hierarchy.

D. It affects nonmanagerial employees, but not managerial employees.

E. Modern information technology's ability to improve efficiency has lessened the amount of restructuring in recent years.


76.

_____ involves contracting with another company, in a low-cost country abroad, to have it perform a work activity the organization previously performed itself.

A. Integrating

B. Telecommuting

C. Outsourcing

D. Restructuring

E. Insourcing

77.

Which of the following management techniques involves giving employees more authority and responsibility over how they perform their work activities?

A. Innovation

B. Total quality management

C. Empowerment

D. Outsourcing

E. Restructuring


78.

A bank allows its tellers to not only handle deposits and disbursement, but also distribute traveler's checks and sell certificates of deposit. This is an example of:

A. innovation.

B. restructuring.

C. total quality management.

D. empowerment.

E. outsourcing.

79.

George works as the human resource manager at Maddy's Confectionaries. It was mandatory for his subordinates to obtain his signature on every document related to the hiring of a new employee. When he realized that this was increasing the duration of the hiring process, he told his subordinates that they no longer needed his signature unless the hire involved extraordinary circumstances. This is an example of:

A. restructuring.

B. outsourcing.


D. empowerment.

E. innovation.


80.

Which of the following is an accurate definition of a self-managed team?

A. It is a group of people who work interdependently and with shared purpose across space, time, and organization boundaries using technology to communicate and collaborate.

B. It involves several professionals who independently address various issues that an organization may have, focusing on the issues in which they specialize.

C. It lessens the autonomy enjoyed by the employee.

D. It refers to a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities.

E. It refers to a team used only for a defined period of time and for a separate, concretely definable purpose.

81.

Organizations that operate and compete in more than one country are known as:

A. domestic organizations.

B. central organizations.

C. holding organizations.

D. quasi-autonomous organizations.

E. global organizations.


82.

The ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors is known as its:

A. competitive advantage.

B. strategy.

C. absolute advantage.

D. goal.

E. mission.

83.

_____ refers to the ease with which a company changes or alters the way it performs its activities to respond to actions of its competitors.

A. Speed

B. Flexibility

C. Innovativeness

D. Stability

E. Differentiation


84.

The process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services is known as:

A. invention.

B. diffusion.

C. innovation.

D. differentiation.

E. integration.

85.

_____ is the creation of a new vision for a struggling company based on a new approach to planning and organizing to make better use of a company's resources and allow it to survive and prosper.

A. Performance management


C. Scientific management

D. Turnaround management

E. Impression management

Essay Questions


86.

What is organizational performance and what is its relationship with efficiency and effectiveness?

87.

Define efficiency. When is an organization said to be efficient?

88.

Explain effectiveness. When is an organization said to be effective?


89.

What are the reasons behind studying management?

90.

Define planning. What are the three steps in the planning process?

91.

Explain the following terms: strategy, low-cost strategy, and differentiation strategy.


92.

What does the managerial function of organizing involve? What is its outcome?

93.

Discuss the managerial function of leading. What is its outcome?

94.

What does the managerial function of controlling involve?


95.

Identify the three levels of management and explain the basic responsibilities of each.

96.

Identify and briefly define the three major types of managerial skills.

97.

What is restructuring and what are its disadvantages?


98.

Explain the significance of information technology with regards to empowering employees and facilitating self-managed teams.

99.

Define competitive advantage. What are its four building blocks?

100.

Discuss the concept of turnaround management.


Chapter 01 The Management Process Today Answer Key

True / False Questions

1. Organizations are collections of people who work together and coordinate their actions to achieve a wide variety of goals, or desired future outcomes. TRUE

Organizations are collections of people who work together and coordinate their actions to achieve a wide variety of goals, or desired future outcomes.

AACSB: Analytic

Blooms: RememberDifficulty: 1 Easy

Learning Objective: 01-01 Describe what management is; why management is important; what managers do; and how managers use organizational resources efficiently and effectively to achieve organizational goals.

Topic: What Is Management?

2. The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively is known as management. TRUE

Management is the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively.

AACSB: Analytic





3. Organizations are efficient when managers maximize the amount of input resources. FALSE

Efficiency is a measure of how productively resources are used to achieve a goal. Organizations are efficient when managers minimize the amount of input resources or the amount of time needed to produce a given output of goods or services.

AACSB: Analytic




4. The number of students competing for places in business courses is on a constant decline. FALSE

Today more students are competing for places in business courses than ever before; the number of people wishing to pursue Master of Business Administration (MBA) degrees—today's passport to an advanced management position—either on campus or from online universities and colleges is at an all-time high.

AACSB: Analytic





5. Managers at all levels and in all departments are responsible for planning, organizing, leading, and controlling. TRUE

Managers perform four essential managerial tasks: planning, organizing, leading, and controlling. Managers at all levels and in all departments—whether in small or large companies, for-profit or not-for-profit organizations, or organizations that operate in one country or throughout the world—are responsible for performing these four tasks.

AACSB: Analytic


Learning Objective: 01-02 Distinguish among planning; organizing; leading; and controlling (the four principal managerial tasks); and explain how managers' ability to handle each one affects organizational performance.

Topic: Essential Managerial Tasks

6. Identifying and selecting appropriate organizational goals and courses of action help managers perform the planning task. TRUE

To perform the planning task, managers identify and select appropriate organizational goals and courses of action. The three steps involved in planning are (1) deciding which goals the organization will pursue, (2) deciding what strategies to adopt to attain those goals, and (3) deciding how to allocate organizational resources to pursue the strategies that attain those goals.

AACSB: Analytic





7. Planning strategy is clear and easy, especially because planning is done under certainty when the result is known. FALSE

Planning strategy is complex and difficult, especially because planning is done under uncertainty when the result is unknown so that success or failure are both possible outcomes of the planning process. Managers take major risks when they commit organizational resources to pursue a particular strategy.

AACSB: Analytic




8. The outcome of organizing is the creation of a strategy. FALSE

Strategy is associated with the managerial function of planning. The outcome of organizing is the creation of an organizational structure, a formal system of task and reporting relationships that coordinates and motivates members so they work together to achieve organizational goals.

AACSB: Analytic





9. An organization's vision is a short, succinct, and inspiring statement of what the organization intends to become and the goals it is seeking to achieve. TRUE

An organization's vision is a short, succinct, and inspiring statement of what the organization intends to become and the goals it is seeking to achieve—its desired future state. In leading, managers articulate a clear organizational vision for the organization's members to accomplish, and they energize and enable employees so everyone understands the part he/she plays in achieving organizational goals.

AACSB: Analytic




10. The controlling task helps managers evaluate how well they themselves are performing the other three tasks of management—planning, organizing, and leading—and take corrective action. TRUE

To exercise control, managers must decide which goals to measure and then they must design control systems that will provide the information necessary to assess performance. The controlling task also helps managers evaluate how well they themselves are performing the other three tasks of management—planning, organizing, and leading—and take corrective action.

AACSB: Analytic





11. The top-line managers form the base of the managerial hierarchy. FALSE

Organizations normally have three levels of management: first-line managers, middle managers, and top managers. At the base of the managerial hierarchy are first-line managers, often called supervisors.

AACSB: Analytic


Learning Objective: 01-03 Differentiate among three levels of management; and understand the tasks and responsibilities of managers at different levels in the organizational hierarchy.

Topic: Levels and Skills of Managers

12. The middle managers supervise the supervisors. TRUE

The first-line managers are often called supervisors. Supervising the first-line managers are middle managers, responsible for finding the best way to organize human and other resources to achieve organizational goals.

AACSB: Analytic




13. In contrast to middle managers, top managers are responsible for the performance of specific departments. FALSE

In contrast to middle managers, top managers are responsible for the performance of all departments. They have cross-departmental responsibility.

AACSB: Analytic





14. The chief executive officer is a company's most senior and important manager, the one all other top managers report to. TRUE

The chief executive officer (CEO) is a company's most senior and important manager, the one all other top managers report to. Today the term "chief operating officer" (COO) refers to the company's top manager who is being groomed to take over as CEO when its current CEO, becomes the chair of the board, retires, or leaves the company.

AACSB: Analytic




15. Today, the term "chief operating officer" refers to the chief executive officer. FALSE

The chief executive officer (CEO) is a company's most senior and important manager, the one all other top managers report to. Today the term "chief operating officer" (COO) refers to the company's top manager who is being groomed to take over as CEO when its current CEO, becomes the chair of the board, retires, or leaves the company.

AACSB: Analytic





16. Conceptual skills include the general ability to understand, alter, lead, and control the behavior of other individuals and groups. FALSE

Conceptual skills are demonstrated in the general ability to analyze and diagnose a situation and to distinguish between cause and effect. Top managers require the best conceptual skills because their primary responsibilities are planning and organizing.

AACSB: Analytic


Learning Objective: 01-04 Distinguish among three kinds of managerial skill; and explain why managers are divided into different departments.


17. Human skills can be learned through education and training, as well as be developed through experience. TRUE

Like conceptual skills, human skills can be learned through education and training, as well as be developed through experience. Organizations increasingly utilize advanced programs in leadership skills and team leadership as they seek to capitalize on the advantages of self-managed teams.

AACSB: Analytic





18. The array of technical skills managers need is independent of the position they hold in their organizations. FALSE

Managers need a range of technical skills to be effective. The array of technical skills managers need depends on their position in their organizations.

AACSB: Analytic




19. Departmental skills that create a core competency give an organization a competitive advantage. TRUE

The term "core competency" is often used to refer to the specific set of departmental skills, knowledge, and experience that allows one organization to outperform its competitors. In other words, departmental skills that create a core competency give an organization a competitive advantage.

AACSB: Analytic





20. Restructuring involves contracting with another company, in a low-cost country abroad, to have it perform a work activity the organization previously performed itself. FALSE

Restructuring involves simplifying, shrinking, or downsizing an organization's operations to lower operating costs. Restructuring can be done by eliminating product teams, shrinking departments, and reducing levels in the hierarchy, all of which result in the loss of large numbers of jobs of top, middle, or first-line managers, as well as nonmanagerial employees.

AACSB: Analytic


Learning Objective: 01-05 Discuss some major changes in management practices today that have occurred as a result of globalization and the use of advanced information technology (IT).

Topic: Recent Changes in Management Practices

21. Restructuring results in the loss of jobs. TRUE

Restructuring can be done by eliminating product teams, shrinking departments, and reducing levels in the hierarchy, all of which result in the loss of large numbers of jobs of top, middle, or first-line managers, as well as nonmanagerial employees.

AACSB: Analytic





22. Outsourcing decreases efficiency because it increases operating costs. FALSE

Outsourcing involves contracting with another company, in a low-cost country abroad, to have it perform a work activity the organization previously performed itself. Outsourcing increases efficiency because it lowers operating costs, freeing up money and resources that can then be used in more effective ways.

AACSB: Analytic




23. Companies use their reward systems to promote empowerment. TRUE

Empowerment is a management technique that involves giving employees more authority and responsibility over how they perform their work activities. Often companies find that empowering employees can lead to so many kinds of performance gains that they use their reward systems to promote empowerment.

AACSB: Analytic





24. When employees start using information technology (IT), they start losing their autonomy. FALSE

Frequently IT allows one employee to perform a task that was previously performed by many employees. As a result, the employee has more autonomy and responsibility.

AACSB: Analytic




25. A self-managed team refers to a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities. TRUE

Information technology (IT) facilitates the use of a self-managed team, a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities. Using IT designed to give team members real-time information about each member's performance, a self-managed team can often find ways to accomplish a task more quickly and efficiently.

AACSB: Analytic





26. Not-for-profit sectors are not affected by global competition. FALSE

Global competition is spurring change in the not-for-profit sector. Schools, universities, police forces, and government agencies are reexamining their operations because looking at how activities are performed in other countries often reveals better ways to do them.

AACSB: Analytic


Learning Objective: 01-06 Discuss the principal challenges managers face in today's increasingly competitive global environment.

Topic: Challenges for Management in a Global Environment

27. The four building blocks of competitive advantage are superior efficiency, quality, innovation, and responsiveness to customers. TRUE

Competitive advantage is the ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors. The four building blocks of competitive advantage are superior efficiency, quality, innovation, and responsiveness to customers.

AACSB: Analytic





28. An organization's efficiency decreases when it reduces the quantity of resources it uses to produce goods or services. FALSE

Organizations increase their efficiency when they reduce the quantity of resources they use to produce goods or services. In today's competitive environment, organizations continually search for new ways to use their resources to improve efficiency.

AACSB: Analytic




29. Innovation is the process of creating new or improved goods and services that customers want. TRUE

Innovation, the process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services, poses a special challenge. Managers must create an organizational setting in which people are encouraged to be innovative.

AACSB: Analytic





30. Typically innovation takes place in small groups or teams. TRUE

Innovation, the process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services, poses a special challenge. Typically innovation takes place in small groups or teams; management decentralizes control of work activities to team members and creates an organizational culture that rewards risk taking.

AACSB: Analytic




31. Innovation takes place when management centralizes control of work activities and creates an organizational culture that precludes risk taking. FALSE

Innovation, the process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services, poses a special challenge. Typically innovation takes place in small groups or teams; management decentralizes control of work activities to team members and creates an organizational culture that rewards risk taking.

AACSB: Analytic





32. Turnaround management is the creation of a new vision for a struggling company based on a new approach to planning and organizing to make better use of a company's resources and allow it to survive and prosper. TRUE

Turnaround management is the creation of a new vision for a struggling company using a new approach to planning and organizing to make better use of a company's resources and allow it to survive and eventually prosper. It involves developing radical new strategies such as how to reduce the number of products sold or change how they are made and distributed, or close corporate and manufacturing operations to reduce costs.

AACSB: Analytic




33. Organizations appoint turnaround CEOs when the organizations become more efficient and effective. FALSE

Organizations that appoint turnaround CEOs are generally experiencing a crisis because they have become inefficient or ineffective; sometimes this is because of poor management over a continuing period, and sometimes it occurs because a competitor introduces a new product or technology that makes their own products unattractive to customers.

AACSB: Analytic





34. Pressure to increase performance may induce managers to behave unethically. TRUE

Too much pressure to perform can be harmful. It may induce managers to behave unethically, and even illegally, when dealing with people and groups inside and outside the organization.

AACSB: Analytic

AACSB: EthicsBlooms: Remember

Difficulty: 1 EasyLearning Objective: 01-06 Discuss the principal challenges managers face in today's increasingly competitive

global environment.Topic: Challenges for Management in a Global Environment

35. Managers seldom find it difficult to manage the diversity in today's workforce. FALSE

Today the age, gender, race, ethnicity, religion, sexual preference, and socioeconomic composition of the workforce presents new challenges for managers. To create a highly trained and motivated workforce, as well as to avoid lawsuits, managers must establish HRM procedures and practices that are legal, are fair, and do not discriminate against any organizational members.

AACSB: Analytic




Multiple Choice Questions


36. Which of the following is NOT true about management and organizational resources?

A.Organizations are collections of people who work together to achieve a wide variety of goals.

B. Managers are responsible for making the most of an organization's human resources to achieve its goals.

C. Management is the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively.

D. An organization's resources include assets such as machinery, raw materials, and computers and information technology.

E. Organizational performance increases in an indirect proportion to increases in efficiency and effectiveness.

Organizational performance is a measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals. Organizational performance increases in direct proportion to increases in efficiency and effectiveness.

AACSB: Analytic

Blooms: RememberDifficulty: 2 Medium




37. Which of the following is an appropriate definition of organizational performance?

A. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization.

B. It is a measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals.

C. It is an approach to modeling organizations using one-on-one interactions between members of the organization as a proxy for all value-adding activities in the organization.

D. It is a management framework that uses and integrates existing management methods and techniques to help teams deliver ever-improving services.

E. It is a measure of the interaction between the managerial culture, the workplace culture, and the surrounding culture.


AACSB: Analytic





38. _____ is a measure of how productively resources are used to achieve a goal.

A. Validity

B. Generalizability

C. Efficiency

D. Effectiveness

E. Reliability


AACSB: Analytic





39. Which of the following is true of efficiency?

A. It is a measure of the appropriateness of the goals that managers have selected for the organization to pursue.

B. Organizations are efficient when managers choose appropriate goals and then achieve them.

C. Lesser the efficiency, higher the organizational performance.

D.Organizations are efficient when managers minimize the amount of input resources.

E. Organizations are efficient when managers maximize the amount of time needed to produce a given output of goods.


AACSB: Analytic

Blooms: UnderstandDifficulty: 2 Medium




40. _____ is a measure of the appropriateness of the goals that managers have selected for the organization to pursue and the degree to which the organization achieves those goals.

A. Efficiency

B. Generalizability

C. Reliability

D. Utility

E. Effectiveness

Effectiveness is a measure of the appropriateness of the goals that managers have selected for the organization to pursue and the degree to which the organization achieves those goals. Organizations are effective when managers choose appropriate goals and then achieve them.

AACSB: Analytic





41. Which of the following is true of effectiveness?

A.Organizational performance increases in direct proportion to increase in effectiveness.

B. Organizations are effective when managers minimize the time needed to produce a given output of services.

C. It is a measure of how productively resources are used to achieve a goal.

D. Organizations are effective when managers minimize the amount of input resources.

E. Effectiveness is related to performance but not efficiency.


AACSB: Analytic





42. Which of the following is true of low efficiency/high effectiveness situations?

A. They arise when managers choose the wrong goals to pursue and make poor use of resources.

B.They arise when managers choose the right goals to pursue, but do a poor job of using resources to achieve these goals.

C. They arise when managers choose the right goals to pursue and make good use of resources to achieve these goals.

D. They result in the production of a low-quality product that customers do not want.

E. They result in the production of a high-quality product that customers do not want.

Low efficiency/high effectiveness situations arise when manager choose the right goals to pursue, but do a poor job of using resources to achieve these goals. These situations result in the production of a product that customers want, but that is too expensive for them to buy.Refer: Figure 1.1

AACSB: Analytic





43. High efficiency/high effectiveness situations:

A. arise when managers choose the wrong goals to pursue and make poor use of resources.

B. result in the production of a low-quality product that customers do not want.

C. result in the production of a product that customers want at a quality and price that they can afford.

D. result in the production of a product that customers want, but that is too expensive for them to buy.

E. arise when managers choose inappropriate goals, but make good use of resources to pursue these goals.

High efficiency/high effectiveness situations arise when managers choose the right goals to pursue and make good use of resources to achieve these goals. It results in the production of a product that customers want at a quality and price that they can afford.Refer: Figure 1.1

AACSB: Analytic





44. Which of the following is true of low efficiency/low effectiveness situations?

A. They arise when managers choose the right goals to pursue, but do a poor job of using resources to achieve these goals.

B. They result in the production of a product that customers want, but that is too expensive for them to buy.

C. They result in the production of a product that customers want at a quality and price that they can afford.

D.They arise when managers choose the wrong goals to pursue and make poor use of resources.

E. They arise when managers choose inappropriate goals, but make good use of resources to pursue these goals.

Low efficiency/low effectiveness situations arise when managers choose the wrong goals to pursue and make poor use of resources. It results in the production of a low-quality product that customers do not want.Refer: Figure 1.1

AACSB: Analytic





45. The goals chosen by the management of Dino's Cafe seemed inappropriate for the store, but the management did make good use of the various resources in pursuing these goals. Dino's Cafe is said to have:

A. low efficiency and high effectiveness.

B. high efficiency and high effectiveness.

C. low efficiency and low effectiveness.

D. low conceptual skills and low human skills.

E. high efficiency and low effectiveness.

High efficiency/low effectiveness situations arise when managers choose inappropriate goals, but make good use of resources to pursue these goals. It results in the production of a high-quality product that customers do not want.Refer: Figure 1.1

AACSB: Analytic

Blooms: ApplyDifficulty: 2 Medium




46. In what order do managers typically perform the managerial functions?

A. Organizing, planning, controlling, leading

B. Organizing, leading, planning, controlling

C. Planning, organizing, leading, controlling

D. Planning, organizing, controlling, leading

E. Leading, organizing, planning, controlling

Typically, the order in which managers perform the managerial functions are: (1) planning, (2) organizing, (3) controlling, and (4) leading.

AACSB: Analytic





47. To perform the _____ task, managers identify and select appropriate organizational goals and courses of action.

A.planning

B. organizing

C. leading

D. controlling

E. commanding

To perform the planning task, managers identify and select appropriate organizational goals and courses of action; they develop strategies for how to achieve high performance. The three steps involved in planning are (1) deciding which goals the organization will pursue, (2) deciding what strategies to adopt to attain those goals, and (3) deciding how to allocate organizational resources to pursue the strategies that attain those goals.

AACSB: Analytic





48. How to allocate organizational resources to pursue the strategies that attain set goals, is a question addressed during:

A. regulating.

B.planning.

C. leading.

D. controlling.

E. commanding.

To perform the planning task, managers identify and select appropriate organizational goals and courses of action; they develop strategies for how to achieve high performance. The three steps involved in planning are (1) deciding which goals the organization will pursue, (2) deciding what strategies to adopt to attain those goals, and (3) deciding how to allocate organizational resources to pursue the strategies that attain those goals.

AACSB: Analytic





49. Which of the following refers to a cluster of decisions concerning what organizational goals to pursue, what actions to take, and how to use resources to achieve these goals?

A. Synergy

B. Value

C. Strategy

D. Mission

E. Business model

Strategy refers to a cluster of decisions concerning what organizational goals to pursue, what actions to take, and how to use resources to achieve these goals.

AACSB: Analytic





50. Which of the following strategies helps an organization to obtain customers by making decisions that allow it to produce goods or services more cheaply than its competitors?

A. Disintermediation strategy

B. Centralization strategy

C. Penetration strategy

D.Low-cost strategy

E. Differentiation strategy

A low-cost strategy is a way of obtaining customers by making decisions that allow an organization to produce goods or services more cheaply than its competitors so it can charge lower prices than they do.

AACSB: Analytic





51. The strategy of delivering new, exciting, and unique products to the customers is known as a _____ strategy.

A. low-cost

B. disintermediation

C. centralization

D. penetration

E. differentiation

The strategy of delivering new, exciting, and unique products to the customers is known as a differentiation strategy.

AACSB: Analytic





52. _____ is the process of structuring working relationships so that organizational members interact and cooperate to achieve organizational goals.

A. Planning

B. Leading

C. Commanding

D. Controlling

E. Organizing

Organizing is structuring working relationships so organizational members interact and cooperate to achieve organizational goals. Organizing people into departments according to the kinds of job-specific tasks they perform lays out the lines of authority and responsibility among different individuals and groups.

AACSB: Analytic





53. When a manager lays out the lines of authority and responsibility among different individuals and groups, the manager is:

A.organizing.

B. leading.

C. controlling.

D. planning.

E. staffing.


AACSB: Analytic





54. A formal system of reporting relationships that coordinates and motivates organizational members so that they work together to attempt to achieve organizational goals is called an organizational:

A. culture.

B. psychology.

C. structure.

D. assimilation.

E. chart.


AACSB: Analytic





55. An organization's _____ is a short, succinct, and inspiring statement of what the organization intends to become.

A. goal

B. value

C. strategy

D.vision

E. mission

An organization's vision is a short, succinct, and inspiring statement of what the organization intends to become and the goals it is seeking to achieve—its desired future state. In leading, managers articulate a clear organizational vision for the organization's members to accomplish, and they energize and enable employees so everyone understands the part he/she plays in achieving organizational goals.

AACSB: Analytic





56. When managers _____, they articulate a clear organizational vision for the organization's members to accomplish, and they energize and enable employees so that everyone understands the part he/she plays in achieving organizational goals.

A. plan

B. organize

C. control

D. command

E. lead

In leading, managers articulate a clear organizational vision for the organization's members to accomplish, and they energize and enable employees so that everyone understands the part he/she plays in achieving organizational goals.

AACSB: Analytic





57. Which of the managerial functions involves managers using their power, personality, influence, persuasion, and communication skills to coordinate people and groups so that their activities and efforts are in harmony?

A.Leading

B. Planning

C. Organizing

D. Controlling

E. Arranging

Leadership involves managers using their power, personality, influence, persuasion, and communication skills to coordinate people and groups so their activities and efforts are in harmony. It revolves around encouraging all employees to perform at a high level to help the organization achieve its vision and goals.

AACSB: Analytic





58. Which of the following is true of leadership?

A. It helps managers evaluate how well they themselves are performing.

B. It revolves around encouraging all employees to perform at a high level to help the organization achieve its vision and goals.

C. Managers evaluate how well an organization has achieved its goals and take corrective actions needed to improve performance.

D. It revolves around regulation of organizational efficiency and effectiveness.

E. Managers decide which goals to measure and then design control systems that will provide the information necessary to assess performance.

Leadership revolves around encouraging all employees to perform at a high level to help the organization achieve its vision and goals. Another outcome of leadership is a highly motivated and committed workforce.

AACSB: Analytic





59. In _____, the task of managers is to evaluate how well an organization has achieved its goals and to take any corrective actions needed to maintain or improve performance.

A. planning

B. organizing

C. leading

D. staffing

E. controlling

In controlling, the task of managers is to evaluate how well an organization has achieved its goals and to take any corrective actions needed to maintain or improve performance. The outcome of the control process is the ability to measure performance accurately and regulate organizational efficiency and effectiveness.

AACSB: Analytic





60. Which of the following processes gives the managers the ability to measure performance accurately and regulate organizational efficiency and effectiveness?

A.Controlling

B. Planning

C. Organizing

D. Leading

E. Staffing


AACSB: Analytic





61. Mark, a manager at Matt's Shack, monitors the work performance of workers in his department to determine if the quality of their work is meeting the standards of the company. Mark is engaging in which of the following managerial functions?

A. Planning

B. Staffing

C. Organizing

D. Leading

E. Controlling


AACSB: Analytic





62. Susan, the CEO of United Group Ltd., reviews the performance of her company in the past month's Profit & Loss Statement to determine if the company is on pace to meet the planned sales and profitability goals. Susan is engaged in which of the following managerial functions?

A. Planning

B. Organizing

C. Staffing

D.Controlling

E. Leading


AACSB: Analytic





63. First-line managers:

A. increase efficiency by helping middle-level managers better use resources to reduce manufacturing costs or improve customer service.

B.are also known as supervisors.

C. are at the top of the managerial hierarchy.

D. work in one single department of an organization.

E. are responsible for finding the best way to organize human and other resources to achieve organizational goals.

At the base of the managerial hierarchy are first-line managers, often called supervisors. They are responsible for daily supervision of the nonmanagerial employees who perform the specific activities necessary to produce goods and services.

AACSB: Analytic





64. Which of the following is true of middle managers?

A. They decide how the different departments should interact.


C. They develop and fine-tune skills and know-how that allow the organization to be efficient and effective.

D. They are responsible for the performance of all departments.

E. They establish organizational goals.

To increase effectiveness, middle managers evaluate whether the organization's goals are appropriate and suggest to top managers how goals should be changed. A major part of the middle manager's job is developing and fine-tuning skills and know-how, such as manufacturing or marketing expertise, that allow the organization to be efficient and effective.

AACSB: Analytic





65. Which of the following is true of top managers?

A. They are responsible for finding the best way to organize human and other resources to achieve organizational goals.


C. They find ways to help first-line managers and nonmanagerial employees better use resources to reduce manufacturing costs or improve customer service.

D.They have cross-departmental responsibility.

E. They are responsible for a single department.

In contrast to middle managers, top managers are responsible for the performance of all departments. They have cross-departmental responsibility. Top managers establish organizational goals, such as which goods and services the company should produce; they decide how the different departments should interact; and they monitor how well middle managers in each department use resources to achieve goals.

AACSB: Analytic





66. Who amongst the following is most likely to be a part of the top management team?

A. Supervisor

B. Head nurse

C. Chief mechanic

D. Divisional manager

E. Chief executive officer

The chief executive officer (CEO) is a company's most senior and important manager, the one all other top managers report to. A central concern of the CEO is the creation of a smoothly functioning top management team, a group composed of the CEO, the chief operating officer (COO), and the vice presidents most responsible for achieving organizational goals.

AACSB: Analytic





67. Being a part of top management at a large fast food chain, Donald is most likely to spend more of his time in:

A.planning and organizing resources.

B. planning and controlling nonmanagerial employees.

C. planning and leading first-line managers.

D. organizing resources and controlling nonmanagerial employees.

E. organizing resources and leading first-line managers.

The amount of time managers spend planning and organizing resources to maintain and improve organizational performance increases as they ascend the hierarchy. Top managers devote most of their time to planning and organizing, the tasks so crucial to determining an organization's long-term performance. The lower that managers' positions are in the hierarchy, the more time the managers spend leading and controlling first-line managers or nonmanagerial employees.

AACSB: Analytic





68. The ability to analyze and diagnose a situation and to distinguish between cause and effect demonstrates a manager's:

A. interpersonal skills.

B.conceptual skills.

C. human skills.


E. communication skills.

Conceptual skills are demonstrated in the general ability to analyze and diagnose a situation and to distinguish between cause and effect. Top managers require the best conceptual skills because their primary responsibilities are planning and organizing.

AACSB: Analytic





69. _____ skills include the general ability to understand, alter, lead, and control the behavior of individuals and groups.

A. Analytic

B. Cognitive

C. Human

D. Technical

E. Conceptual

Human skills include the general ability to understand, alter, lead, and control the behavior of other individuals and groups. The ability to communicate, to coordinate, and to motivate people, and to mold individuals into a cohesive team distinguishes effective from ineffective managers.

AACSB: Analytic





70. The job-specific skills required to perform a particular type of work at a high level are a part of a manager's:

A. human skills.

B. communication skills.

C. interpersonal skills.

D.technical skills.

E. conceptual skills.

Technical skills are the job-specific skills required to perform a particular type of work or occupation at a high level. Examples include a manager's specific manufacturing, accounting, marketing, and increasingly, IT skills.

AACSB: Analytic





71. The specific set of departmental skills, knowledge, and experience that allows one organization to outperform its rivals is known as the organization's:

A. strategy.

B. vision.

C. goal.

D. mission.

E. core competency.

The term "core competency" is often used to refer to the specific set of departmental skills, knowledge, and experience that allows one organization to outperform its competitors. In other words, departmental skills that create a core competency give an organization a competitive advantage.

AACSB: Analytic





72. Simplifying, shrinking, or downsizing an organization's operations to lower operating costs is known as:

A. restructuring.

B. outsourcing.

C. empowering.

D. innovating.

E. telecommuting.

Restructuring involves simplifying, shrinking, or downsizing an organization's operations to lower operating costs. It can be done by eliminating product teams, shrinking departments, and reducing levels in the hierarchy, all of which result in the loss of large numbers of jobs of top, middle, or first-line managers, as well as nonmanagerial employees.

AACSB: Analytic





73. Fresh Farms, Inc., is facing financial problems. In order to tackle the situation, the management has decided to reduce the number of middle managers by 20 percent to help them cut costs. This is an example of:

A. telecommuting.

B. restructuring.

C. outsourcing.

D. empowering.

E. innovating.


AACSB: Analytic





74. The company for which Margaret works has announced that due to declining global sales, it will lay off 12 percent of its labor force. This is an example of:

A. innovating.

B. telecommuting.

C. restructuring.

D. outsourcing.

E. empowering.


AACSB: Analytic





75. Which of the following is true of restructuring?

A. It increases the operating costs.

B. It reduces the morale of the remaining employees.

C. It does not change the levels in hierarchy.

D. It affects nonmanagerial employees, but not managerial employees.

E. Modern information technology's ability to improve efficiency has lessened the amount of restructuring in recent years.

Restructuring produces some powerful negative outcomes. It can reduce the morale of remaining employees, who worry about their own job security. And top managers of many downsized organizations realize that they downsized too far when their employees complain they are overworked and when increasing numbers of customers complain about poor service.

AACSB: Analytic





76. _____ involves contracting with another company, in a low-cost country abroad, to have it perform a work activity the organization previously performed itself.

A. Integrating

B. Telecommuting

C. Outsourcing

D. Restructuring

E. Insourcing

Outsourcing involves contracting with another company, in a low-cost country abroad. It increases efficiency because it lowers operating costs, freeing up money and resources that can then be used in more effective ways.

AACSB: Analytic





77. Which of the following management techniques involves giving employees more authority and responsibility over how they perform their work activities?

A. Innovation


C. Empowerment

D. Outsourcing

E. Restructuring

Empowerment is a management technique that involves giving employees more authority and responsibility over how they perform their work activities. Information technology is being increasingly used to empower employees because it expands employees' job knowledge and increases the scope of their job responsibilities.

AACSB: Analytic





78. A bank allows its tellers to not only handle deposits and disbursement, but also distribute traveler's checks and sell certificates of deposit. This is an example of:

A. innovation.

B. restructuring.


D.empowerment.

E. outsourcing.


AACSB: Analytic





79. George works as the human resource manager at Maddy's Confectionaries. It was mandatory for his subordinates to obtain his signature on every document related to the hiring of a new employee. When he realized that this was increasing the duration of the hiring process, he told his subordinates that they no longer needed his signature unless the hire involved extraordinary circumstances. This is an example of:

A. restructuring.

B. outsourcing.


D.empowerment.

E. innovation.


AACSB: Analytic





80. Which of the following is an accurate definition of a self-managed team?

A. It is a group of people who work interdependently and with shared purpose across space, time, and organization boundaries using technology to communicate and collaborate.

B. It involves several professionals who independently address various issues that an organization may have, focusing on the issues in which they specialize.

C. It lessens the autonomy enjoyed by the employee.

D.It refers to a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities.

E. It refers to a team used only for a defined period of time and for a separate, concretely definable purpose.

Information technology facilitates the use of a self-managed team, a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities. Using IT designed to give team members real-time information about each member's performance, a self-managed team can often find ways to accomplish a task more quickly and efficiently.

AACSB: Analytic





81. Organizations that operate and compete in more than one country are known as:

A. domestic organizations.

B. central organizations.

C. holding organizations.

D. quasi-autonomous organizations.

E. global organizations.

Global organizations are organizations that operate and compete in more than one country. The rise of such organizations has pressured many organizations to identify better ways to use their resources and improve their performance.

AACSB: Analytic





82. The ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors is known as its:

A.competitive advantage.

B. strategy.

C. absolute advantage.

D. goal.

E. mission.


AACSB: Analytic





83. _____ refers to the ease with which a company changes or alters the way it performs its activities to respond to actions of its competitors.

A. Speed

B.Flexibility

C. Innovativeness

D. Stability

E. Differentiation

Today companies can win or lose the competitive race depending on their speed—how fast they can bring new products to market—or their flexibility—how easily they can change or alter the way they perform their activities to respond to actions of their competitors.

AACSB: Analytic





84. The process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services is known as:

A. invention.

B. diffusion.

C. innovation.

D. differentiation.

E. integration.

Innovation, the process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services, poses a special challenge. Managers must create an organizational setting in which people are encouraged to be innovative.

AACSB: Analytic





85. _____ is the creation of a new vision for a struggling company based on a new approach to planning and organizing to make better use of a company's resources and allow it to survive and prosper.

A. Performance management


C. Scientific management

D.Turnaround management

E. Impression management

Turnaround management is the creation of a new vision for a struggling company using a new approach to planning and organizing to make better use of a company's resources and allow it to survive and eventually prosper. It involves developing radical new strategies such as how to reduce the number of products sold or change how they are made and distributed, or close corporate and manufacturing operations to reduce costs.

AACSB: Analytic




Essay Questions


86. What is organizational performance and what is its relationship with efficiency and effectiveness?


AACSB: Analytic




87. Define efficiency. When is an organization said to be efficient?

Efficiency is a measure of how productively resources are used to achieve a goal. Organizations are efficient when managers minimize the amount of input resources (such as labor, raw materials, and component parts) or the amount of time needed to produce a given output of goods or services.

AACSB: Analytic





88. Explain effectiveness. When is an organization said to be effective?


AACSB: Analytic





89. What are the reasons behind studying management?

Some of the reasons of studying management are:

• In any society or culture resources are valuable and scarce; so the more efficient and effective use that organizations can make of those resources, the greater the relative well-being and prosperity of people in that society. Because managers decide how to use many of a society's most valuable resources, they directly impact the well-being of a society and the people in it. Understanding what managers do and how they do it is of central importance to understanding how a society creates wealth and affluence for its citizens.• Although most people are not managers, and many may never intend to become managers, almost all of us encounter managers because most people have jobs and bosses. Moreover, many people today work in groups and teams and have to deal with coworkers. Studying management helps people deal with their bosses and their coworkers. It reveals how to understand other people at work and make decisions and take actions that win the attention and support of the boss and coworkers. Management teaches people not yet in positions of authority how to lead coworkers, solve conflicts between them, achieve team goals, and thus increase performance.• In any society, people are in competition for a very important resource—a job that pays well and provides an interesting and satisfying career; and understanding management is one important path toward obtaining this objective.

AACSB: Analytic

Blooms: UnderstandDifficulty: 3 Hard




90. Define planning. What are the three steps in the planning process?

Planning is the process of identifying and selecting appropriate goals. The three steps involved in planning are:

• deciding which goals the organization will pursue,• deciding what strategies to adopt to attain those goals, and• deciding how to allocate organizational resources to pursue the strategies that attain those goals.

AACSB: Analytic




91. Explain the following terms: strategy, low-cost strategy, and differentiation strategy.

To perform the planning task, managers identify and select appropriate organizational goals and courses of action; they develop strategies for how to achieve high performance.

• Strategy refers to cluster of decisions concerning what organizational goals to pursue, what actions to take, and how to use resources to achieve these goals.• A low-cost strategy is a way of obtaining customers by making decisions that allow an organization to produce goods or services more cheaply than its competitors so it can charge lower prices than they do.• A differentiation strategy is a way of obtaining customers by offering them new, exciting, and unique goods or services.

AACSB: Analytic


Learning Objective: 01-02 Distinguish among planning; organizing; leading; and controlling (the four principal


managerial tasks); and explain how managers' ability to handle each one affects organizational performance.Topic: Essential Managerial Tasks

92. What does the managerial function of organizing involve? What is its outcome?

Organizing is structuring working relationships so that organizational members interact and cooperate to achieve organizational goals. Organizing people into departments according to the kinds of job-specific tasks they perform lays out the lines of authority and responsibility among different individuals and groups.The outcome of organizing is the creation of an organizational structure, a formal system of task and reporting relationships that coordinates and motivates members so they work together to achieve organizational goals. Organizational structure determines how an organization's resources can be best used to create goods and services.

AACSB: Analytic





93. Discuss the managerial function of leading. What is its outcome?

In leading, managers articulate a clear organizational vision for the organization's members to accomplish, and they energize and enable employees so everyone understands the part he/she plays in achieving organizational goals. Leadership involves managers using their power, personality, influence, persuasion, and communication skills to coordinate people and groups so that their activities and efforts are in harmony. Leadership revolves around encouraging all employees to perform at a high level to help the organization achieve its vision and goals. Another outcome of leadership is a highly motivated and committed workforce.

AACSB: Analytic




94. What does the managerial function of controlling involve?

In controlling, the task of managers is to evaluate how well an organization has achieved its goals and to take any corrective actions needed to maintain or improve performance. The outcome of the control process is the ability to measure performance accurately and regulate organizational efficiency and effectiveness. To exercise control, managers must decide which goals to measure and then they must design control systems that will provide the information necessary to assess performance. The controlling task also helps managers evaluate how well they themselves are performing the other three tasks of management—planning, organizing, and leading—and take corrective action.

AACSB: Analytic


Learning Objective: 01-02 Distinguish among planning; organizing; leading; and controlling (the four principal


managerial tasks); and explain how managers' ability to handle each one affects organizational performance.Topic: Essential Managerial Tasks

95. Identify the three levels of management and explain the basic responsibilities of each.

The three levels are first-line managers, middle managers, and top managers.At the base of the managerial hierarchy are first-line managers, often called supervisors.They are responsible for the daily supervision of the nonmanagerial employees who perform the specific activities necessary to produce goods and services.Supervising the first-line managers are middle managers, responsible for finding the best way to organize human and other resources to achieve organizational goals. To increase efficiency, middle managers find ways to help first-line managers and nonmanagerial employees better use resources to reduce manufacturing costs or improve customer service. To increase effectiveness, middle managers evaluate whether the organization's goals are appropriate and suggest to top managers how goals should be changed. Often the suggestions that middle managers make to top managers can dramatically increase organizational performance. A major part of the middle manager's job is developing and fine-tuning skills and know-how, such as manufacturing or marketing expertise, that allow the organization to be efficient and effective.Top managers are responsible for the performance of all departments. They have cross-departmental responsibility. They establish organizational goals, deciding how the different departments should interact, and monitor how well middle managers in each department use resources to achieve goals. Top managers are ultimately responsible for the success or failure of an organization.

AACSB: Analytic





96. Identify and briefly define the three major types of managerial skills.

The three types of managerial skills are: conceptual, human, and technical.Conceptual skills are demonstrated in the general ability to analyze and diagnose a situation and to distinguish between cause and effect. Top managers require the best conceptual skills because their primary responsibilities are planning and organizing.Human skills include the general ability to understand, alter, lead, and control the behavior of other individuals and groups. The ability to communicate, to coordinate, and to motivate people, and to mold individuals into a cohesive team distinguishes effective from ineffective managers.Technical skills are the job-specific skills required to perform a particular type of work or occupation at a high level. Managers need a range of technical skills to be effective. The array of technical skills managers need depends on their position in their organizations.

AACSB: Analytic





97. What is restructuring and what are its disadvantages?

Restructuring involves simplifying, shrinking, or downsizing an organization's operations to lower operating costs. It can be done by eliminating product teams, shrinking departments, and reducing levels in the hierarchy, all of which result in the loss of large numbers of jobs of top, middle, or first-line managers, as well as nonmanagerial employees.Restructuring can reduce the morale of remaining employees, who worry about their own job security. Top managers of many downsized organizations realize that they have downsized too far when their employees start complaining that they are overworked and when customer complaints about poor service increases.

AACSB: Analytic





98. Explain the significance of information technology with regards to empowering employees and facilitating self-managed teams.

Empowerment is a management technique that involves giving employees more authority and responsibility over how they perform their work activities. Information technology (IT) expands employees' job knowledge and increases the scope of their job responsibilities. Frequently IT allows one employee to perform a task that was previously performed by many employees. As a result, the employee has more autonomy and responsibility.IT also facilitates the use of a self-managed team, a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities. Using IT designed to give team members real-time information about each member's performance, a self-managed team can often find ways to accomplish a task more quickly and efficiently. Moreover, self-managed teams assume many tasks and responsibilities previously performed by first-line managers, so a company can better utilize its workforce. First-line managers act as coaches or mentors whose job is not to tell employees what to do but to provide advice and guidance and help teams find new ways to perform their tasks more efficiently. Using the same IT, middle managers can easily monitor what is happening in these teams and make better resource allocation decisions as a result.

AACSB: Analytic





99. Define competitive advantage. What are its four building blocks?


• Organizations increase their efficiency when they reduce the quantity of resources (such as people and raw materials) they use to produce goods or services.• Companies have introduced quality-enhancing techniques known as total quality management for improving quality.• Innovation is the process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services.• Organizations compete for customers with their products and services, so training employees to be responsive to customers' needs is vital for all organizations, but particularly for service organizations.

Feedback: Refer: Figure 1.6

AACSB: Analytic





100. Discuss the concept of turnaround management.

Turnaround management is the creation of a new vision for a struggling company using a new approach to planning and organizing to make better use of a company's resources and allow it to survive and eventually prosper. It involves developing radical new strategies such as how to reduce the number of products sold or change how they are made and distributed, or close corporate and manufacturing operations to reduce costs. Organizations that appoint turnaround CEOs are generally experiencing a crisis because they have become inefficient or ineffective; sometimes this is because of poor management over a continuing period, and sometimes it occurs because a competitor introduces a new product or technology that makes their own products unattractive to customers.

AACSB: Analytic





Documents

Testbank Management Ch-1